News & Trending Money News

15 of Warren Buffett’s Most Enduring Financial Controversies and Scandals

Take a closer look at the controversies and scandals that have followed Warren Buffett throughout his iconic career.

By Adam Palasciano

Edited by Lauren Wellbank

Updated Jan. 16, 2025

Warren Buffett is known worldwide as one of the most successful investors in history, earning his nickname “The Oracle of Omaha.” Over the decades, Buffett has built a reputation for financial fitness and philanthropy, becoming a trusted voice in the investing world. Yet, as with anyone operating at the top of their field, he hasn’t avoided controversy.

Whether tied to his investment strategies, corporate acquisitions, or ethics, Buffett has faced scrutiny for decisions that have sparked public debate. Here are 15 financial controversies that continue to linger around Warren Buffett’s legacy.

Steal this billionaire wealth-building technique

The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.

A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.

If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)

Wesco Financial Corporation acquisition

In 1974, Buffett and his longtime partner Charlie Munger were embroiled in a controversy over the acquisition of Wesco Financial Corporation.

They were accused of interfering with another company’s attempt to acquire Wesco, allegedly in an effort to secure their own stake in the business. The SEC investigated, and shareholders received a $115,000 payout as compensation — a rare blemish on Buffett’s investment record.

Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.

Buffalo Evening News acquisition

Buffett faced antitrust charges after acquiring the Buffalo Evening News. He was accused of breaking a "gentlemen’s agreement" with competitors, which led to legal proceedings. Although Buffett prevailed, the case highlighted the challenges of consolidating media companies and the ethical dilemmas tied to such deals.

Claims of contradicting trading ethics

A ProPublica report in 2023 accused Buffett of actions that seemed at odds with his public statements on trading ethics.

Questions were raised about Buffett’s personal trading activities connected to some of his companies, prompting people to wonder whether Buffett consistently practices what he preaches regarding fairness and transparency.

Get a free stock valued between $5 to $200

Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

Open and fund a Robinhood account and earn up to $200 in stock

Goldman Sachs investment

During the 2008 financial crisis, Warren Buffett made headlines by investing $5 billion in Goldman Sachs preferred stock, signaling confidence in the U.S. financial system. When Goldman redeemed the shares in 2011, Berkshire Hathaway profited $3.7 billion.

However, Buffett’s ties to Goldman, a company criticized as a symbol of financial greed, sparked debates about the ethical implications of the investment.

Coca-Cola compensation scandal

As a major shareholder of Coca-Cola, Buffett came under fire in 2014 when the company proposed an executive compensation plan that critics described as excessive. While Buffett abstained from voting, his decision not to oppose the plan outright drew criticism from those who expected him to take a stand against corporate greed.

Berkshire Hathaway’s ties to fossil fuels

Buffett has often been criticized for Berkshire Hathaway’s investments in fossil fuel companies. Despite his public acknowledgment on climate change, his continued support for oil and gas ventures has sparked debates about whether his actions align with his words on environmental responsibility.

Grow Your $$: 11 brilliant ways to build wealth after 40

Kraft Heinz accounting scandal

Buffett’s investment in Kraft Heinz took a hit when the company faced an accounting scandal in 2019. The SEC investigated irregularities in its financial reporting, leading to restatements of earnings.

While Buffett wasn’t directly implicated, the controversy raised questions about his oversight of portfolio companies.

Wells Fargo scandal

Berkshire Hathaway held a 10% stake in Wells Fargo starting in 1989, but the relationship soured after the bank’s 2016 scandal. Wells Fargo faced a $185 million fine for unethical practices, including opening fraudulent bank accounts and cross-selling products and services to customers.

Buffett condemned the bank’s initial attempts to downplay the revelations. In the end, Wells Fargo paid $3 billion to settle investigations, and Berkshire Hathaway divested nearly all its shares by 2021 and completed the sale in 2022.

Salomon Brothers scandal

In the early 1990s, Buffett was pulled into the Salomon Brothers bond trading scandal. As a major shareholder, he stepped in to run and stabilize the company after traders were caught submitting false bids to the U.S. Treasury.

While his leadership helped salvage the firm, the scandal remains a notable blemish on Berkshire Hathaway’s history.

Earn up to a $300 bonus and grow your money with up to 4.00% APY

This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 4.00% APY.⁴ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at <a href="http://sofi.com/banking">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>

This is one of the top accounts we’ve seen, and offers like this can be rare. You work hard, and now it’s time to make your money work for you — with SoFi, you can grow your money with hardly any effort!

SoFi has no account or overdraft fees⁵ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A.  The 30-Day Evaluation Period refers to the "Start Date" and "End Date" set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the "30-Day Evaluation Period"). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY.  Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage. and additional FDIC insurance up to $2 million on deposits is available through a seamless network of participating banks.⁶ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a> ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a> Plus, you can receive your paycheck up to 2 days early.⁸ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

How to earn up to $300: Sign up and make a direct deposit within the first 25 calendar days of the promotional period, then collect a $300 cash bonus with a direct deposit of $5,000 or more.

SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a>

Open your SoFi account and set up direct deposit

Lack of diversity in leadership

Buffett has faced criticism for the lack of emphasis on diversity within Berkshire Hathaway’s leadership ranks.

Buffet’s stance is that he always selects board members based on relevant business experience, competence, shareholder value, and special interest in Berkshire Hathaway. Diversity isn’t known to be a key factor when selecting leadership at the company.

General Reinsurance Corporation controversy

In 2006, Berkshire Hathaway’s subsidiary General Reinsurance Corporation faced serious accusations of collaborating with AIG in a scheme involving finite reinsurance. The claim was that this practice didn’t actually involve insurance, but that it was instead a financial tactic to make AIG’s financial reports look better by avoiding risk transfer.

The fallout led to General Reinsurance settling with AIG shareholders for $60.5 million, paying $19.5 million to the U.S. Postal Inspection Service Consumer Fraud Fund, and making another $12.2 million in payments to resolve SEC charges.

Moody’s role in the 2008 financial crisis

Buffett’s significant stake in Moody’s came under scrutiny after the 2008 financial crisis. As a credit rating agency, Moody’s was accused of contributing to the crisis by giving overly favorable ratings to risky mortgage-backed securities.

Buffett said very little about his investment in the company, and some believe that he downplayed the company’s role in the meltdown.

Supercharge your investments: See what could happen if you add fine art to your investment portfolio

Allegations of insider trading

Buffett has faced occasional accusations of insider trading, with critics questioning whether his access to non-public information has given him an unfair advantage in certain deals. Although no legal actions have stuck, the whispers persist as part of his controversial legacy.

NetJets lawsuits

NetJets, a Berkshire Hathaway subsidiary known for its luxury private jet services, has faced a series of legal battles over the years.

In one high-profile case, NetJets filed a defamation lawsuit against its pilots’ union, accusing it of spreading false claims about the company’s business practices. This controversy and others highlight the ongoing tensions within one of Buffett’s most exclusive investments.

Allegations of monopolistic behavior

Some of Berkshire Hathaway’s acquisitions and business practices have been labeled monopolistic by critics, who argue that the conglomerate’s dominance in certain sectors stifles competition.

While Buffett defends his business model as a collection of independently run companies, the accusations linger.

Bottom line

Warren Buffett’s long career has been defined by financial success and public admiration, but even “The Oracle of Omaha” has not escaped controversy. From corporate acquisitions to ethical debates, these scandals highlight the complexities of navigating power and influence in the financial world.

For readers, these stories offer a chance to reflect on the lessons, and risks, inherent in investing, like how do you balance opportunity with ethics as you seek to avoid surprising financial mistakes and set yourself up for a bright financial future?

More from FinanceBuzz:

Invest in Paintings by Basquiat, Picasso, Banksy

Masterworks Benefits

Invest in art like a millionaire for a relatively low cost
Art investments have outperformed the S&P 500 by over 131% for 26 years
Purchase shares of artwork by top artists
Hedge against inflation and diversify your portfolio

Visit Masterworks